For the data behind the commentary, download the full Q3 2026 U.S. Life Sciences Report.
The life sciences sector is showing early signs of recovery. Overall vacancy declined in Q3 after four years of steady increases, suggesting a potential market inflection point. Improving fundamentals are laying the foundation for more sustained long-term growth.Q3 2026 Life Sciences Key Trends
- Absorption turned positive in Q3, totaling nearly 500,000 square feet (sf). Leasing activity also accelerated, increasing 11% quarter-over-quarter (QOQ). Despite stronger demand this quarter, total net absorption remained negative for the year.
- Asking rents continue to soften, falling 5.6% year-over-year (YOY) to $62.85 per square foot (psf). Some markets, including Los Angeles-Orange County and Philadelphia, saw asking rents grow on a YOY basis. However, rents are expected to continue to soften in the near term until demand strengthens further.
- The overall vacancy rate dropped 20 basis points (bps) QOQ to 23.9%, marking the first quarterly decline in four years and indicating that vacancy has likely peaked. While there may be some short-term volatility, we expect the vacancy rate to trend lower over the next year.
- The construction pipeline continues shrink with close to 5.2 million square feet (msf) currently under construction, down 40% from a year ago. The pipeline is overwhelmingly focused on build-to-suit (BTS) projects, which account for 73% of the pipeline.
- R&D property sales totaled $3 billion in Q3, up 50% YOY, while pricing increased 13% YOY. Deal activity was driven largely by buyers making opportunistic purchases, though interest rate uncertainty may temper activity in the near term.
- Quarterly venture capital funding declined to $7.9 billion in Q3. However, year-to-date (YTD) funding is up 6% YOY. Average deal size fell 18% YOY to $17 million, indicating that capital may be flowing to early-stage companies. The IPO market remains active, with $7.3 billion in deal volume YTD, nearly four times higher than the same period last year.
For the data behind the commentary, download the full Q3 2026 U.S. Life Sciences Report.
